With only minor deviations, the Federal Reserve does what the regime wants it to do, which is, for the most part, monetize the regime’s debt at a low interest rate. From Ryan McMaken at mises.org:
For decades, the US Federal Reserve has carefully cultivated and promoted the idea that it is somehow separate and independent from the US regime that created it.
The ruse has certainly worked. Economists and media pundits frequently refer to this alleged Fed “independence” as if it were a given, and as if there were a wall of separation between the executive branch and the central bank. Others take it even further, and in podcasts and social media one encounters a variety of crackpot theories asserting that the Fed is somehow at odds with the regime, or that the Fed answers only to bankers without regard for the regime’s agenda. Some of those who have been hoodwinked by the Fed-independence myth will, at times, even claim that the Fed is some kind of benevolent fifth column that’s trying to undermine federal fiscal profligacy and save the dollar from tax-and-spend politicians.
Yes, the senior technocrats at the Fed don’t always agree with Congressional or White House priorities, but the same could be said of diplomats at the State Department. Few would claim, however, that disagreement means there is “State-Department independence.”
Indeed, its true that bureaucrats generally prefer to do their own thing without having to get approval from the higher-ups. In this respect, Fed personnel are no different from senior technocrats at any executive-branch department. In practice, however, historical experience shows that, time and again, the Federal Reserve has “coordinated” its policies with those of the Treasury and the administration to ensure that the federal government gets exactly what it wants from the central bank.
